Bloomberg’s Balchunas Impressed by Spot Bitcoin ETFs’ Debut

Last Friday, Bloomberg Senior ETF analyst Eric Balchunas joined VettaFi vice chairman Tom Lydon and head of research Todd Rosenbluth for the VettaFi Cryptocurrency Symposium to talk about the launch of the first spot bitcoin ETFs the day before.

Nine of the funds were brand new and currently have more than $2 billion in combined assets under management. Meanwhile, the Grayscale Bitcoin Trust (GBTC) converted into an ETF wrapper after existing in its original form for about a decade. It brought roughly $25 billion in assets under management into its new structure.

“GBTC, in my opinion, is an outlier because it came over as a fully grown adult. I really am more interested in the newborns, because as you know, the ETF industry is very hard,” Bachunas said.

“Launching an ETF is like sending a newborn into the Amazon jungle. It is really tough out there. The fact that these nine newborns were able to garner up to $2 billion in volume is unbelievable,” he added, noting that many of the nine new products had more than $100 million in volume during their first day of trading.

Balchunas highlighted fees and liquidity as being crucial factors in the success of the new funds, though he said he usually sees fee and brand are the two most important factors. Except for GBTC, which charges an expense ratio of 1.5%, Balchunas noted that the first batch of spot bitcoin ETFs are “all pretty low cost,” though he pointed out that GBTC brings significant liquidity to the table.